SGX Securities announced the launch of the CGS Fullgoal CSI 1000 ETF on Thursday, November 9, 2023. This new offering, the first of its kind outside China, provides global investors with exposure to high-growth small-cap stocks in China's rebounding economy. The ETF was listed via the SGX-SZSE ETF link, a unique collaboration between SGX Group and CGS-CIMB Securities.
The CSI 1000 ETF mirrors the CSI 1000 Index of China's small-cap market and includes 1,000 companies from various sectors with market caps under 20 billion yuan. These sectors include electronics, pharmaceuticals, and machinery. The fund has dual currency trading in USD and SGD and is valued at US$12.4 million.
The ETF offers exposure to high-tech growth industries in China's tech innovation era. As of the end of October, the IT sector had the highest weightage at about 25%, followed by industrials and materials sectors at 21.5% and 15.9%, respectively. Ademola Olopade, CGS-CIMB's group head of investment management, underscored the ETF's exposure to "high-growth stocks" like future Tencent or Alibaba (NYSE:BABA) stocks in sectors like pharmaceuticals and innovative technology.
Despite a year-to-date decline of 4.9% for the CSI 1000 index after a 21.6% drop last year due to the pandemic, there has been a shift globally from trading to investing with increased interest in ETFs like the CGS Fullgoal CSI 1000 ETF. This fund is a feeder into an existing master fund in China and caters to northbound clients in China through the ETF link between China and Singapore.
This marks the second successful collaboration within two months between SGX Group and CGS-CIMB Securities, following the CGS Fullgoal Vietnam 30 Sector Cap Index ETF listing in August. The addition of the CSI 1000 ETF increases SGX's portfolio to 42 listed ETFs with a combined AUM of S$11 billion as of the end of September 2023. SGX Group and CGS-CIMB Securities leaders expressed satisfaction with this milestone, emphasizing that ETFs can serve as a buffer against market volatility amidst geopolitical tensions and the ongoing pandemic.
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